The Power Sector Assets and Liabilities Management Corp. (PSALM) has sent out final letters of demand for payment to two companies with long overdue obligations with the government, the Department of Finance (DOF) said.
In a statement, the DOF revealed that final demand letters by PSALM President-CEO Irene Besido Garcia and acting Vice President for Finance Manuel Marcos Villalon II were sent to First Bay Power Corp. (FBPC) and Abra Electric Cooperative, Inc. (ABRECO).
According to the DOF, the two companies owe PSALM at least P671.16 million.
“Both firms were given seven-calendar days from receipt of the demand letters to pay their arrears or
face legal action,” DOF said. “The separate final demand letters to FBPC and ABRECO were both dated August 24, 2020.”
DOF said the FBPC has “long overdue financial obligations” to PSALM of P35.15 million, while ABRECO’s arrears now amount to P599.13 million on its power account and another P36.89 million in unremitted Universal Charge (UC) collections.
Garcia and Villalon told the two firms in the letters that PSALM “shall be constrained to avail of all appropriate legal remedies to protect PSALM and the Government’s interest, including the filing of criminal, civil and administrative cases” against them.
Copies of the separate final demand letters were furnished Finance Secretary and PSALM chairman Carlos G. Dominguez III and Energy Secretary Alfonso Cusi.
The demand letter to ABRECO was addressed to Victor Baula, its acting general manager, while the one sent to FBPC was addressed to its president, Cesar Reyes, and its treasurer, Nenita Macapinlac.
In the case of ABRECO, its overdue power account as of July 31, 2020 covered a period of 10 years, consisting of restructured account (RA), interest and penalty, value-added tax (VAT) and ERC-approved power rate adjustments.
According to Garcia, PSALM previously sent several written demand letters to ABRECO asking for the settlement of its outstanding power account obligations, along with its Statements of Accounts (SOAs).
“However, up to this date, ABRECO continues to ignore the demand letters,” she claimed.
ABRECO committed to propose a payment option for its outstanding power account dues on December 9 last year and earlier entered into successive restructuring agreements with PSALM, only to breach all of them.
Despite ABRECO’s blatant disregard of its commitment to settle its arrears, PSALM sent to it a copy of a new restructuring agreement last Dec. 20, 2019, but this was also ignored by the power cooperative.
On top of the P599.13 million due on its power account, ABRECO has also failed to remit UC collections totaling P36.89 million covering a period ranging from 18 to 51 months.
PSALM’s computations on ABRECO’s unremitted UC collections are based only on the cooperative’s submitted UC collection reports from February 2003 to December 2015. These do not include yet its unremitted collections from 2016 to the present.
Garcia said PSALM previously sent letters to ABRECO urging it to remit in full its UC collections but these were also ignored.
FBPC, on the other hand, incurred arrears covering a seven-year period as of July 31, 2020.
Its long overdue obligation of P35.15 million includes its power bill, interest and VAT, and ERC-approved power rate adjustments.
PSALM had also consistently issued SOAs to FBPC, but these were all ignored. Garcia said FBPC’s overdue account will continue to accumulate interest until it is fully paid.